ITO Vs Narendra Sampatlal Bafna Bafna Tyre and Auto (ITAT Pune)
The appeal before the Income Tax Appellate Tribunal (ITAT), Pune, arose from the Revenue’s challenge to the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (CIT(A)/NFAC) for Assessment Year 2017-18, while the assessee filed cross objections supporting the appellate order. The Assessing Officer (AO) reopened the assessment under Section 147 based on information received from the Investigation Wing following a search conducted on Shri Sachin Nahar, a finance broker. According to the recorded reasons, statements under Sections 132(4) and 131 and seized notebooks, loose papers and other records indicated that the assessee had allegedly obtained cash loans of ₹6.20 crore through Shri Nahar, which were not reflected in the return of income. Consequently, the AO reopened the assessment under Section 148 and ultimately treated the alleged cash loan as unexplained money under Section 69A read with Section 115BBE.
During the reassessment proceedings, the assessee denied having taken any cash loan from Shri Sachin Nahar, stated that he did not know Shri Nahar, and contended that borrowed money could not be treated as unexplained money under Section 69A. The assessee also argued that since the information emanated from a search conducted on a third party and was based on seized documents, the proceedings, if any, ought to have been initiated under Section 153C and not Section 147. The assessee further sought copies of the documents relied upon and requested cross-examination of Shri Sachin Nahar, which, according to the record, was not granted.
